It's tax time for freelancers!
Freelancing is awesome. That is – right up until it comes time to file your taxes. If this is your first year freelancing, you may not realize that you are going to be taxed two times. What we mean is that your freelance work counts as personal income on your taxes. But you are also in business for yourself, and so you are charged a payroll tax.
Get ready for the double whammy on April 15th.
Note: If you're working through Artisan you don't have to worry! We take out all applicable taxes for you.
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The “double tax” is the best argument, though, for taking as many tax deductions as you legally can. While you should always consult a tax professional instead of relying on word-of-mouth advice, we’ve compiled some of our favorite tax write-offs that may help you come out a little bit ahead this year.
Ask Your Accountant About These Tax Write-Offs
Federal tax law varies from year to year, and differences always exist between state and city rules for freelancers. Check with your tax preparer to see if any of these deductions are available to you:
- If you’ve set up a home office, you can probably write it off. The bad news is that it isn’t a big write off; it’s based on a percentage of the resource used. You must use the office primarily for freelancing and nothing else. Go here for an article on how to calculate your home office write-off.
- You can write off a percentage of the utilities you used to power the stuff in your office. You can even claim a portion of your home or renter’s insurance.
- Speaking of “stuff,” that phone or new printer you bought? Write it off if you’re using it for freelancing or your car or any other item you bought as a freelancing business tool. Again, rules apply, so ask for help from a pro.
- Don’t forget your car mileage if you traveled to meet clients.
- Since we’re in a write-off frenzy, how about claiming any online subscriptions you bought just so you can run your freelance business? Whether it’s Adobe Creative Cloud or Dropbox, you can write it off.
- Office supplies = total write-off.
- Advertising your business? Yes.
- What about taking a client to dinner? You can probably claim about half of the expenditure – assuming you kept the receipt.
- If you’re paying for insurance and aren’t covered by an employer, that’s a write-off.
- If you took a class and it’s related to your freelance work, deduct it.
- Could your debt be a write-off? If you took out a business loan, you can deduct the interest you’re paying on the debt. Same thing with fees from a business bank account.
Get More Revenue in 2023 with Artisan
Hopefully, these ideas will get you started toward a successful tax filing this year.
Thinking ahead to next year - If your goal is to add more work to your bottom line for 2023, don’t hesitate to contact Artisan Talent to see how we can help.